As an Amazon seller looking to expand your product offerings, sourcing goods from India can be a lucrative opportunity. However, navigating the intricacies of international shipping is crucial for a successful venture.
In this comprehensive guide, we will explore the common shipping terms, compare air and sea freight options for Amazon sellers and help you decide on a shipping company in India.
Before delving into the best shipping options, let’s define common shipping terms that play a vital role in international trade:
- LCL (Less Than Container Load): A shipping option for moderate quantities of products that do not require a full shipping container.
- FCL (Full Container Load): Perfect for larger shipments that require an entire shipping container for transportation.
- EXW (Ex-Works): The seller’s responsibility is limited to making the goods available at their premises. The buyer assumes all costs and risks thereafter.
- FOB (Free on Board): The seller is responsible for costs and responsibilities until the goods cross the ‘ship’s rail’ at the origin port, after which the buyer takes over.
- DDP (Delivered Duty Paid): The seller bears all costs, responsibilities, and risks until the goods are delivered to the buyer’s location.
- CIF (Cost Insurance Freight): The seller is responsible for costs, insurance, and freight until the goods reach the destination port.
Best options for shipping from India to USA
When deciding on the best shipping option for your goods via an Indian freight forwarder, consider the following factors:
- Air freight for smaller light shipments- For smaller, time-sensitive shipments, air freight is the more cost-effective choice. Air shipments from Northern India, departing from Delhi Airport, ensure swift delivery to your destination.
- Sea freight for larger shipments- For bulkier shipments, sea freight is the preferred option. When shipping from India, it is advisable to send goods to the East Coast for optimal efficiency.
- Port of departure for sea shipments- The majority of sea shipments from India originate from the Port of Nhava Sheva (Mumbai), catering to various destinations worldwide. However, goods manufactured in the southern regions of India may have different departure points. Always consult your freight forwarder to find the nearest suitable option for your specific requirements.
Advantages of FOB terms
When obtaining costs from your suppliers, FOB terms are highly beneficial. Under FOB, the seller bears all costs and responsibilities, including export clearance, until the goods cross the ‘ship’s rail’ at the origin port. After this point, the buyer assumes all costs, responsibilities, and risks, ensuring transparency in cost assessment.
Considerations for ex-works transactions
While Ex-Works transactions are the easiest for sellers to perform, they can prove costly for buyers. As the buyer is responsible for moving the goods to the port and clearing customs, additional expenses and complexities may arise.
DDP and CIF – uncommon options in India
Delivered Duty Paid (DDP) and Cost Freight Insurance (CIF) terms are less common in India. Under DDP, the seller assumes all costs, responsibilities, and risks until the goods reach the buyer. Similarly, while CIF may appear cost-effective, it is crucial to note that it does not cover several destination charges, making careful evaluation essential.
Sea vs. air freight: A price and speed comparison
Air shipping is faster, typically taking around one week from India to your destination in the US or elsewhere, depending on the location of your factory.
Conversely, sea shipping from the Port of Nhava Sheva to the US East Coast takes approximately 22 days, with destinations like Savannah/Jacksonville requiring around 28 days.
Optimizing air freight for small shipments
Air shipping can be more cost-effective for small shipments due to fewer costs compared to port charges associated with sea freight. However, the decision between air and sea freight ultimately depends on the urgency of the shipment and its size.
Always select the best shipping terms, such as FOB, for transparent cost assessment and consult with a reputable freight forwarder to optimize your shipping strategy. By understanding the nuances of shipping and logistics, you can streamline your importation process and enhance your business’s overall efficiency.
Sending many smaller sea shipments can be quite costly as there is around USD$ 700 in charges on top of the shipping component each time you do a shipment. This can work out very expensive if you only have around 200 or 300 items. Try doing three 300-item shipments compared to one 900-item shipment that could save you a USD$ 1400.
Air shipping costs more for small items. With air shipping you do not have the extra USD$ 700 in charges so in some cases it can be cost effective while ensuring your shipments are delivered 3+ weeks faster.
To make the best decision for your business, seek advice from a trusted Indian freight forwarder such as Seair and conduct your own due diligence to optimize your shipping strategy and cost-efficiency.
When importing goods into the US, customs duties are applicable and calculated based on the HS Code assigned to your product. These duties can range from 0% to approximately 12%, with most products falling under the 4% threshold. Utilizing the services of our preferred shipper, Seair Global, can simplify the customs clearance process, as they have a customs brokerage office in New York.
Once your goods clear customs, your freight forwarder in India will provide an invoice for the shipment, including all applicable duties. It is crucial to settle these duties before your goods can be released and transported to their final destination, ensuring a smooth and compliant shipping process.
For Amazon sellers looking to import products from China to India, Europe and US, a solid understanding of international shipping is crucial. By grasping the common shipping terms, assessing the best shipping options, and selecting a good shipping company, like SINO Shipping, sellers can optimize their supply chain and enhance their marketplace presence.
Next steps to source suppliers from India
India Sourcing Network can manage the entire sourcing process for you in India. Our Done For You Sourcing services are designed to provide end-to-end solutions. Submit your sourcing request.